NAPP® 2007 Annual Meeting
     “2007 Patent Practice Update”
             July 17, 2007




  Preparing a Nanotech
       ...
• A patent is a legally-recognized temporary
  monopoly which the government grants in
  exchange for complete disclosure ...
Basic requirements for patentability:


•   Statutory subject matter
•   Useful
•   New (novel)
•   Non-Obvious




      ...
• A trade secret is something which confers a
  business advantage, is not generally known, and
  that the owner takes ste...
Basic requirements for trade secret
protection (under UTSA)


• Information must not be generally known or readily
  ascer...
Examples of trade secrets:


•   Customer lists
•   Formulas
•   Manufacturing processes
•   Marketing/business strategies...
Advantages of Patents:


• Patents deter competitors who might be tempted to copy
• Potential revenue stream from licensin...
Disadvantages of Patents

• Nanotechnology is a new technology
• Expensive
• All information in a patent application becom...
Advantages of Trade Secrets


• Usually cheaper (no initial cost)
• Potentially unlimited duration provided secrecy is
  m...
Disadvantages of Trade Secrets


•   Generally considered less valuable than patents—difficult to
    value/license
•   Po...
Patent protection usually better choice
when:


• The technology of the invention is new
• The invention can be reverse-en...
Trade secret protection usually better
choice when:


• Invention has a short “shelf-life”
• The invention can easily be k...
Trade secret protection is the only
option when:


• The invention is not patentable
• The inventor does not have the mone...
The Five Biggest Mistakes:


•   Ignorance of statutory bars
•   Withholding information from the patent/USPTO
•   Cutting...
Whether patent or trade secret—


• Make privacy your TOP priority
• Monitor your competitors’ patents
• Make sensible dec...
www.smithmoorelaw.com
Other Considerations

• Regulatory Arena

• Product Liability

• Entity structure

• IP Exploitation



                  ...
Regulatory Arena




                   www.smithmoorelaw.com
Regulatory Arena

• Environment => EPA (Environmental Protection Agency)

• Health => NIOSH (National Institute for Occupa...
Environment => EPA




 Source: U.S. Environmental Protection Agency
         Nanotechnology White Paper



              ...
Health => NIOSH




Source: Progress Toward Safe Nanotechnology
in the Workplace, A Report from the NIOSH
Nanotechnology R...
Health => NIOSH




Source: Progress Toward Safe Nanotechnology
in the Workplace, A Report from the NIOSH
Nanotechnology R...
EHS Regulatory Arena
 Environment => EPA
 Health => NIOSH
 Safe Workplace => OSHA

 •   Focus is “engineered, unbound nano...
Foods and Drugs => FDA
regulated products
•   Foods                            •   Animal Feeds
                          ...
Foods and Drugs => FDA
regulates products on a product-by-
product basis
•   Pre-market approval
     – For products that ...
Foods and Drugs => FDA
regulated products expected to be
impacted by nanotechnology
• Drugs (new molecular entities (NMEs)...
Foods and Drugs => FDA
currently approved
“nano-scale” therapeutics
• Gadolinium chelate for MRI imaging (Gd-DTPA
  Dimegl...
Foods and Drugs => FDA
currently approved
“nano-scale” devices
• Silver nanoparticles (anti-bacterial wound
  dressing)

•...
Foods and Drugs => FDA
other currently approved
nanoparticle-containing products
• Cosmetics (containing lipid nanoparticl...
Foods and Drugs => FDA
review Process for
Nanotechnology Drugs
• Existing pharmtox tests are probably adequate for
  most ...
Product Liability => Nano as Toxic Torts
• Asbestos, DDT, PCBs

• Some possible issues:
   – Potential plaintiffs and defe...
Export => DOS, DOC, . . . etc.

• Department of State (DOS)
   – 22 CFR 121.1
       (a.k.a. ITAR: US Munitions List => “i...
Entity structure

• Sole proprietorship   . . . and another thing!

• Partnership           Which state(s)?

• Corporation...
IP Exploitation => Patents




                             www.smithmoorelaw.com
• Patent Cross-License
       You
   Claim A + B
                                     C

                                 ...
2005 Nanotech Landscape


                     - Cross-citation
                     - Number of claims
                  ...
IP Exploitation => Patents

• Disruptive Technology vs.
  Complementary Technology

• Commercialize
  – Licensing
  – Merg...
Protection of know-how

• Parties involved:
   – Employees
   – R&D-partners
   – Subcontractors
   – Clients
• Non Disclo...
Licensing

• Is it an option? Can you find a partner?
• Alternatives use it yourself or sell the invention &
  patent
• Ex...
NAPP® 2007
      Preparing a Nanotech Strategy
              July 17, 2007




THANK YOU
                                 ...
Smith Moore LLP
Office Locations
Charlotte, North Carolina        Wilmington, North Carolina
Charlotte Plaza, Suite 110   ...
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Preparing a Nanotech Strategy

  1. 1. NAPP® 2007 Annual Meeting “2007 Patent Practice Update” July 17, 2007 Preparing a Nanotech Strategy © 2007 Stanislav Antolin Used by NAPP with permission. www.smithmoorelaw.com
  2. 2. • A patent is a legally-recognized temporary monopoly which the government grants in exchange for complete disclosure by the inventor of how to make and use the invention. www.smithmoorelaw.com
  3. 3. Basic requirements for patentability: • Statutory subject matter • Useful • New (novel) • Non-Obvious www.smithmoorelaw.com
  4. 4. • A trade secret is something which confers a business advantage, is not generally known, and that the owner takes steps to maintain as a secret. www.smithmoorelaw.com
  5. 5. Basic requirements for trade secret protection (under UTSA) • Information must not be generally known or readily ascertainable by proper means • Must have “independent economic value” due to its secrecy • Trade secret holder must use “reasonable measures under the circumstances” to protect the secrecy of the information www.smithmoorelaw.com
  6. 6. Examples of trade secrets: • Customer lists • Formulas • Manufacturing processes • Marketing/business strategies www.smithmoorelaw.com
  7. 7. Advantages of Patents: • Patents deter competitors who might be tempted to copy • Potential revenue stream from licensing • Patenting avoids the need to maintain complete security for inventions • Potential large damage awards for infringement • Provide an asset to attract investment and measure value of company • May be used to exclude imports • Injunction—to keep competitors out of a particular market or technology www.smithmoorelaw.com
  8. 8. Disadvantages of Patents • Nanotechnology is a new technology • Expensive • All information in a patent application becomes public knowledge once the patent application is published (as early as 18 months) • Limited duration • Not self-enforcing • Limited coverage (technical information) • No right to exclude for at least two (and possibly more) years • Only grants the right to exclude others www.smithmoorelaw.com
  9. 9. Advantages of Trade Secrets • Usually cheaper (no initial cost) • Potentially unlimited duration provided secrecy is maintained • Information is not revealed to the public • Broader coverage (non-technical information) • Effective immediately www.smithmoorelaw.com
  10. 10. Disadvantages of Trade Secrets • Generally considered less valuable than patents—difficult to value/license • Potentially expensive to maintain—requires constant vigilance • Protection is easily lost • Competitors may develop information independently • No exclusionary rights • Difficult to discover loss • Difficult to recover damages for misappropriation • Based on state law • May be blocked by patents from practicing your own trade secret www.smithmoorelaw.com
  11. 11. Patent protection usually better choice when: • The technology of the invention is new • The invention can be reverse-engineered easily • The invention is likely to be developed by another • There is a need to disseminate information about the invention • Potential to get broad claims and “pioneer” status in a new technology www.smithmoorelaw.com
  12. 12. Trade secret protection usually better choice when: • Invention has a short “shelf-life” • The invention can easily be kept secret and cannot be easily reverse-engineered • Scope of claims would be unduly narrow www.smithmoorelaw.com
  13. 13. Trade secret protection is the only option when: • The invention is not patentable • The inventor does not have the money to seek patent protection www.smithmoorelaw.com
  14. 14. The Five Biggest Mistakes: • Ignorance of statutory bars • Withholding information from the patent/USPTO • Cutting corners/doing things cheaply • Emphasizing quantity over quality • Failing to get assignments/agreements www.smithmoorelaw.com
  15. 15. Whether patent or trade secret— • Make privacy your TOP priority • Monitor your competitors’ patents • Make sensible decisions with respect to intellectual property www.smithmoorelaw.com
  16. 16. www.smithmoorelaw.com
  17. 17. Other Considerations • Regulatory Arena • Product Liability • Entity structure • IP Exploitation www.smithmoorelaw.com
  18. 18. Regulatory Arena www.smithmoorelaw.com
  19. 19. Regulatory Arena • Environment => EPA (Environmental Protection Agency) • Health => NIOSH (National Institute for Occupational Safety and Health) • Safe Workplace => OSHA (Occupational Safety and Health Administration) • Foods and Drugs => FDA (Food and Drug Administration) • Consumer Product => CPSC (Consumer Product Safety Commission) • Export => DOS, DOC, DHS, . . . Etc. (State, Commerce, Homeland Security, . . . Etc. ) www.smithmoorelaw.com
  20. 20. Environment => EPA Source: U.S. Environmental Protection Agency Nanotechnology White Paper www.smithmoorelaw.com
  21. 21. Health => NIOSH Source: Progress Toward Safe Nanotechnology in the Workplace, A Report from the NIOSH Nanotechnology Research Center www.smithmoorelaw.com
  22. 22. Health => NIOSH Source: Progress Toward Safe Nanotechnology in the Workplace, A Report from the NIOSH Nanotechnology Research Center www.smithmoorelaw.com
  23. 23. EHS Regulatory Arena Environment => EPA Health => NIOSH Safe Workplace => OSHA • Focus is “engineered, unbound nano particles” • Worker safety and emissions are key areas of focus • Positive potential impact of nanotech via environmental remediation (surface area and unique absorption properties of nano materials • General consumer not well versed in nanotech • Depending on study, public perception of nanotech is very high in Asia, neutral in the U.S. and in danger or already negative in Europe • Governments, environmental organizations and industry working together on nano EHS issues • Regulation is not the biggest risk facing nanotech, a loss of public acceptance is.” – Woodrow Wilson Center www.smithmoorelaw.com
  24. 24. Foods and Drugs => FDA regulated products • Foods • Animal Feeds • Pharmaceuticals – All interstate domestic and imported, including – Human produce, fish, shellfish, – Animal shell eggs, milk (not meat – Tamper resistant packaging or poultry) • Medical devices – Bottled water • Radiation emitting electronic – Wine (<7% alcohol) products • Vaccines – Infant formula • Blood products • Food additives • Tissues – Colors • Sterilants – Food containers • Counter-terrorism products • Cosmetics • Dietary Supplements www.smithmoorelaw.com
  25. 25. Foods and Drugs => FDA regulates products on a product-by- product basis • Pre-market approval – For products that require an FDA approval prior to introduction to the market. • Market clearance – For products that are similar to products that were cleared to market previously, or are prepared to approved specifications. FDA review process for these products is more rapid than for pre-market approval. • Post-market review – For these products, market entry and distribution are at the discretion of the manufacturer and FDA monitors the behavior of these products. Regulatory action is taken if adverse events occur. www.smithmoorelaw.com
  26. 26. Foods and Drugs => FDA regulated products expected to be impacted by nanotechnology • Drugs (new molecular entities (NMEs) or delivery systems) • Medical devices • Biotechnology products • Tissue engineering products • Vaccines • Cosmetics • Combination products www.smithmoorelaw.com
  27. 27. Foods and Drugs => FDA currently approved “nano-scale” therapeutics • Gadolinium chelate for MRI imaging (Gd-DTPA Dimeglumine) • Iron oxide particles for MRI imaging (Feridex) • Products using NanoCrystal technology (Rapamune, Emend) • Liposomes (Doxil, DaunoXome) • Microemulsions (Cyclosporine) • Albumin-bound nanoparticles (Abraxane) www.smithmoorelaw.com
  28. 28. Foods and Drugs => FDA currently approved “nano-scale” devices • Silver nanoparticles (anti-bacterial wound dressing) • Engineered Calcium Phospahate (NanOss TM, duplicates microstructure, composition and performance of human bone) • Nanoparticle dental restorative (3M ESPE Filtek) www.smithmoorelaw.com
  29. 29. Foods and Drugs => FDA other currently approved nanoparticle-containing products • Cosmetics (containing lipid nanoparticles or “nanosomes” used as delivery systems, for controlled release of active ingredients; L’Oreal, Estee Lauder) • Sunscreens (containing titanium dioxide and zinc oxide nanoparticles which make the product appear transparent) www.smithmoorelaw.com
  30. 30. Foods and Drugs => FDA review Process for Nanotechnology Drugs • Existing pharmtox tests are probably adequate for most nano-products • For new nano-materials, new “tools” may be needed www.smithmoorelaw.com
  31. 31. Product Liability => Nano as Toxic Torts • Asbestos, DDT, PCBs • Some possible issues: – Potential plaintiffs and defendants? – Exposure to harmful substances or products? – Causation/uncertainty questions? – Latency between exposure to the substance and manifestation of adverse impacts? – Strict liability: design defect or failure to warn? – Some possible indications from potential • Defendants: – A lack of transparency/CBI on safety evidence? – Internal/public statement inconsistencies? – Responsive to agency and public? www.smithmoorelaw.com
  32. 32. Export => DOS, DOC, . . . etc. • Department of State (DOS) – 22 CFR 121.1 (a.k.a. ITAR: US Munitions List => “inherently military properties”) • Department of Commerce (DOC) – 15 CFR 774 Categories 0-9 (a.k.a. EAR: Commerce Control List => “dual use”) • Violation => civil sanctions, criminal sanctions (e.g., fines, jail time) can apply to the individual www.smithmoorelaw.com
  33. 33. Entity structure • Sole proprietorship . . . and another thing! • Partnership Which state(s)? • Corporation – Limited Liability Company – C corporation – S corporation www.smithmoorelaw.com
  34. 34. IP Exploitation => Patents www.smithmoorelaw.com
  35. 35. • Patent Cross-License You Claim A + B C Competitor A Claims A + B + C +C +B A B + A • Design Around • Investigate Flaw Customer wants B A+B+C www.smithmoorelaw.com
  36. 36. 2005 Nanotech Landscape - Cross-citation - Number of claims to application areas - White space => patenting room - Entanglement => likely overlap Source: Lux Research Inc. Foley & Lardner LLP www.smithmoorelaw.com
  37. 37. IP Exploitation => Patents • Disruptive Technology vs. Complementary Technology • Commercialize – Licensing – Mergers & Acquisitions – Sales – Litigation www.smithmoorelaw.com
  38. 38. Protection of know-how • Parties involved: – Employees – R&D-partners – Subcontractors – Clients • Non Disclosure Agreements • Implementation of efficient security measures www.smithmoorelaw.com
  39. 39. Licensing • Is it an option? Can you find a partner? • Alternatives use it yourself or sell the invention & patent • Exclusive, sole or non-exclusive license • Territory • Proprietary vs. open licensing • Licensing is the biggest business in the world!!! www.smithmoorelaw.com
  40. 40. NAPP® 2007 Preparing a Nanotech Strategy July 17, 2007 THANK YOU Stan Antolin Smith Moore LLP 300 North Greene Street Suite 1400 Greensboro, NC 27401 336.378.5516 (voice) 336.433.7591 (direct fax) © 2007 Stanislav Antolin Used by NAPP with permission. www.smithmoorelaw.com
  41. 41. Smith Moore LLP Office Locations Charlotte, North Carolina Wilmington, North Carolina Charlotte Plaza, Suite 110 300 N. 3rd, Suite 301 201 S. College Street Wilmington NC 28401 Charlotte NC 28244 910.251.7001 704.384.2600 Atlanta, Georgia Greensboro, North Carolina One Atlantic Center, Suite 3700 300 N. Greene Street, Suite 1400 1201 West Peachtree Street Greensboro NC 27401 Atlanta GA 30309 336.378.5200 404.962.1000 Raleigh, North Carolina www.smithmoorelaw.com 2800 Two Hannover Square Raleigh NC 27601 919.755.8700 www.smithmoorelaw.com

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